In the captivating realm of business valuation, where fortunes hang in the balance, one rule reigns supreme: Revenue Ruling 59-60. But beyond the dry legalese lies a world of strategic insight and industry analysis that holds the power to unlock the secrets of success. Imagine a treasure map penned by the brilliant Dr. Michael Porter… Continue Reading »
The shocking truth about new competition and what it means for you
Introduction In every business valuation, the expert should follow Revenue Ruling 59 60. Revenue Ruling59-60 states “The economic outlook in general and the condition and outlook of the specific industry in particular. (emphasis added) Dr. Michael Porter has written the gold standard for performing industry analysis. He has cited five forces of the industry that… Continue Reading »
The Five Forces of Industry
Revenue Ruling 59-60, the Holy Grail of Business Valuations states that industry analysis is a factor that is fundamental and requires careful analysis in each case. The question becomes, where do you find information on how to analyze an industry. Five Forces of the Industry Michael Porter, Ph. D, discusses the five forces of the… Continue Reading »
Can I Have Your Business Valuation Model So I Can Update It Myself?
Performing a business valuation is a complex task. It can require 40 hours with no work experience to approximately 132 hours of training with 10,000 hours of work experience to obtain a business valuation credential. Obviously the 132 hour training program is more in-depth and rigorous. Business Valuation Certifications The intent of these types of… Continue Reading »
What Does Fair Market Value Mean to Me?
For a business valuation, different Standards of Value are defined differently but the application of approaches and methods may be different. Definition of Fair Market Value “… as the price at which the property would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy… Continue Reading »
How to Disqualify an Expert that Uses a Calculation of Value
Different States have different standards for determining the business value in litigation settings. Typically the standard of value will be Fair Market Value or Fair Value. The standard of value sets the requirements for the development work needed to be completed by the business valuator. The standard of value describes the circumstances under which the… Continue Reading »
An Easy Way to Discredit a Business Valuation Expert
Upon completion of a business valuation report, the expert wants to convey to the readers that work was completed and the conclusion reached. Not having a conclusion as to the work performed is a waste of time money and effort. The Statement on Standards for Valuation Services #1(”SSVS #1”) are the Professional Standards followed by… Continue Reading »
How Can Valuation Experts Have Widely Differences of Opinion?
When two experts perform a business valuation on a company, the likelihood of both of them having the same value is probably slim to none. Assuming the two experts are equally qualified, have well respected business valuation designations and equivalent years of experience, maybe the values would be similar. There are numerous factors that come… Continue Reading »
What is a Business Valuation Review?
There are a number of questions that I have encountered and explained to both clients and attorney’s related to reviewing business valuation reports. These are often called review reports or rebuttal reports. The Accredited in Business Appraisal Review (“ABAR”) is a certification that teaches business valuation professionals on various techniques for reviewing a business valuation… Continue Reading »
Establishing Billing Rates for Business Valuators
There are a number of questions that I have encountered and explained to both clients and attorney’s related to how billing rates are determined for business valuation professionals. I will have a broad discussion of this today and in future topics will address other issues that are in the minds of both the client and… Continue Reading »